Insights from the Girard School of Business and the School of Science and Engineering
Predictive and prescriptive analytics play a key part in how many organizations solve current challenges and determine future strategy. Both offer significant job opportunities for those who seek a degree in data science or business analytics.
Many factors drive the need for analytics. Each industry has its own problems that data can help solve. In the business world, companies want an edge on competitors. In healthcare, data can help create the best service possible while improving patient outcomes.
Data Mining and Descriptive Analytics
Before looking at predictive and prescriptive analytics, it’s important to understand data mining and descriptive analytics.
These concepts involve taking past data and categorizing, aggregating and classifying it, answering the question: “When certain decisions were made, what was the result?” Executives can then use that data to inform future moves.
The Use of Predictive Analytics
Predictive analytics is designed to answer the question: “What will happen if we take this action?” Predictive software seeks to make guesses about future events based on past and current data. The software uses advanced algorithms to reach these conclusions. It uncovers trends in current data.
It also finds links between data sets and learns how one interacts with the other. In marketing, the relationship between demographic information and sales data can help marketers better focus campaigns on the right group of buyers at the right time.
In healthcare, researchers use predictive analytics to find which communities are most likely to develop certain medical conditions. Airlines and major hotel chains use predictive analytics to set prices. Banks may use predictive analytics to determine an applicant’s ability to repay a loan.
The Use of Prescriptive Analytics
Prescriptive analytics take the next logical step. Given a specific goal, prescriptive analytics recommend a course of action that will best achieve that goal in the future, evaluating all resulting outcomes so that choices can be adjusted before they are even made.
In healthcare, the hope is that prescriptive analytics can support choices made by medical professionals in real-time. Given a situation based on a patient’s health history and current condition, it can evaluate potential outcomes and determine the best course of action in seconds. This could improve choices made in high-pressure situations.
Another Step Beyond
Beyond the concepts of predictive and prescriptive analytics, we find discovery analytics, in which analytics programs support the creation of completely new approaches. In healthcare, this might mean the development of a new drug. In marketing, it might mean a brand-new approach to developing and managing marketing campaigns.
With this type of analytics, researchers run elaborate simulations to determine what works and what doesn’t without putting the data to use in the real world.
Data analytics students learning about these concepts put themselves in position to be at the center of cutting-edge business strategy. Learn more about careers available to graduates of the Merrimack Data Science and Business analytics programs.